Recession Killing Obama Climate Plan

Congress is trying to fast track healthcare reform. But Obama's cap-and-trade plan? Not so much. And these Gallup poll numbers give you some perspective as to why: "For the first time in Gallup's 25-year history of asking Americans about the trade-off between environmental protection and economic growth, a majority of Americans say economic growth should be given the priority, even if the environment suffers to some extent."

Economy 51 percent, environment 42 percent. Here is the party ID breakdown: Republicans 64-31, Independents 50-42, Democrats 44-50. (A new Gallup poll also shows support for nuclear energy soaring.)
 
Now folks with science PhDs tend to prefer a cap-and-trade system to raise the price on CO2 because it places a defined emission limit on the climate-altering gas. Those with economics PhDs tend to favor a direct carbon tax for its transparency and economic efficiency. 

Cap-and-trade proponents, however, have generally had the better luck with politicians, such as President Obama and congressional Democrats. Their persuasive closing argument: Voters don't want to pay higher energy prices. And while both plans would raise costs for consumers, a carbon tax makes that painful reality far more obvious to tax-averse Americans than a system where companies bid for carbon permits and then pass costs along. In short, a straight carbon tax is as much a political loser today as it was back in 1993 when President Clinton was forced to abandon plans for a heat-content, or Btu, tax.

So just how flummoxed is the cap-and-trade crowd right about now? Congressional Democrats from Big Carbon states, as well as conservative Republicans, have immediately identified and attacked the new White House cap-and-trade plan as a de facto carbon tax. In a recent hearing, Sen. Debbie Stabenow, a Michigan Democrat, called Obama's proposal "unlikely to happen," while Sen. Lindsey Graham, a South Carolina Republican, blasted it as a "radical" approach that would "destroy the ability of Congress to come together." (It also doesn't help the White House that its budget predicts a cap-and-trade system would generate just $80 billion in annual revenue when implemented in 2012. Private estimates put that number at roughly $300 billion. Washington conspiracy theorists speculate that the missing $200 billion might be diverted to help fund healthcare reform.)

If it want to still push a green plan, better the White House eventually pivot and instead push a carbon tax that, for instance, returns 100 percent of revenue back to consumers as a dividend. That's the plan favored by climate activist and NASA scientist James Hansen. Or it could adopt the "tax what you burn, not what you earn" approach of Al Gore, who advocates replacing America's Social Security payroll tax with a revenue-neutral carbon tax.

Either way, bipartisan support is there for the taking. Influential conservative economists such as Gary Becker, Kevin Hassett and Gregory Mankiw favor a carbon tax, as does columnist Charles Krauthammer. (So too, by the way, Obama economic adviser Paul Volcker, Energy Secretary Stephen Chu, and the Democrat-controlled Congressional Budget Office.) A carbon tax would be a post-partisan solution for a president who campaigned as a post-partisan problem solver.